Dividends and Google devises radical changes to stay on top

When you invest in a company, you expect and hope it will grow and the company will be profitable for years to come, but that is easier said that done. If the company is at the top, your investment has grown by multiple percentage, you are delighted you made a good decision and because you are ahead you tend to hold and not worry about the company. You can check the metrics the company has to ensure you they are doing well, the stock will go up and down, but you can hold on. Then a change happens or is noticed by the investment community and all of sudden, competitors that you think the company did not have, they are alive and looking like they will gain market share. How does the company react?

In an article by Nico Grant of the New York Times News Service, the complacency at Google has been changed to panic to we can come out ahead.

Google owns Android and that system is in many smart phones including Samsung. If you have a Samsung phone, the default system for checking the internet is Google. The contract is worth about $3 billion a year to Google. For Apple users, the contract is worth about $20 billion. According to the article, Google’s employees were shocked when they learned Samsung was considering going with Microsoft’s Bing as a default. The reason or the elephant in the room is Microsoft announced Bing was going to work with AI to make it better. After the shock reaction, Google felt panic and now they have announce Android will come with AI features.

The new features are under the project name Magi. The designers, engineers and executives are working to ensure the new search engine would offer users a far more personalized service, attempting to anticipate user’s needs.

Billions of people use Google’s search engine every day which translates into business worth $162 billion a year.

Google has been doing AI research for years. Its DeepMind Lab in London, UK is considered one of the best research center in the world. Jim Lecinski, a former Google of VP sales and service said, the company has been goaded into action and now has to convince users that it was as powerful, competent and contemporary as its competitors.

Linking to dividend paying stocks, staying at the top and being a profitable company is a difficult job because the competitors are after year. There is always a new trend in every industry and people have to believe the company can and does adapt to what is contemporary every year. Why does X company have this feature and your company does not? If the company updates its features but its customers do not like it, will they switch? It is wonderful to have a moat to protect or keep out the competition, but all moats are eventually passable. As an investor you want dull and boring on the financials, but excitement in the product offering. Dull and boring is the company had good margins to make a profit to pay dividends to reward shareholders. If the financials are not dull and boring, find alternatives sooner than later.

There are more questions than answers, till the next time – to raising questions.


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